Amazon's New Streaming Service Is Cheaper Than Standard Netflix

But it may not be as good of a deal as you think.
Amazon's award-winning original series "Transparent" is available exclusively on its streaming service.
Amazon's award-winning original series "Transparent" is available exclusively on its streaming service.

Watch your back, Netflix: Amazon is coming for your lunch.

The online shopping giant announced Sunday that it will offer a standalone package for its Amazon Prime streaming video service, eliminating the need to pay for a costly annual package that includes perks you may not be interested in. The standalone streaming service will cost $8.99 a month and give viewers access to exclusive shows like "Transparent" and "The Man in the High Castle" in addition to a slew of movies like "Interstellar" and "Teenage Mutant Ninja Turtles."

In what is surely not coincidental timing, Amazon's announcement comes shortly after Netflix said the price for its most popular plan will go up to $9.99 from $8.99 this May. New Netflix subscribers already pay $9.99 for access to high-definition video, and longtime subscribers will be subject to the new price starting next month.

A chart from Netflix explains the service's pricing structure.
A chart from Netflix explains the service's pricing structure.

Previously, customers who wanted access to Amazon's streaming library needed to pay for the costly Prime service -- a $99 annual charge that includes access to free two-day shipping on eligible products, among other perks. As part of its new announcement, Amazon also said customers can pay a new $10.99 monthly charge for the full Prime service rather than an annual fee, though you'll end up paying more on balance if you go that route ($131.88 annually rather than $99).

For what it's worth, paying $8.99 a month for streaming video also isn't the best deal in reality, as it amounts to $107.88 over the course of 12 months, and you don't get other Prime perks. Still, you might find it more comfortable to pay for streaming in monthly installments rather than as one lump sum.

As The Wall Street Journal noted, streaming video has become a valuable cornerstone to Amazon's business -- the company reportedly spends about $3 billion on it annually. In addition to shows like "Transparent" that emulate the television format, Amazon is also investing in films, nabbing rights to Woody Allen and Spike Lee movies that would previously have been released by traditional studios.

The idea is for Amazon to become a dominant force in the media space. As people increasingly move away from traditional cable services, they might be coaxed to subscribe to Amazon exclusively -- filling the brand's coffers. It's already estimated that there are at least 57 million Amazon Prime subscribers versus Netflix's 75 million worldwide; convincing people to jump ship with a cheaper streaming plan seems like a viable way to capture an even larger audience.

Or you could just subscribe to both services: a total of $18.98 a month is still far and away cheaper than whatever you've got coming through that dusty set-top box.